EIA: Future demand buoys Canadian shale, LNG projects

Christopher E. Smith
Pipeline Editor

HOUSTON, Jan. 15 -- The US Energy Information Administration sees Canadian gas shale formations as an increasingly important part of US natural gas imports in 2009. In its "US Natural Gas Imports and Exports: 2007" special report published this month, EIA cited renewed interest and optimism regarding unconventional gas recovery in Canada following the successes seen in the northeast Texas Barnett shale and other formations in the Lower 48 states.

EIA estimated 2007 production in the Upper Montney region of British Columbia at 80 MMcfd of gas and expects this to rise rapidly in 2009. The report listed Encana Corp., Apache Corp., and EOG Resources Inc. as having listed reserves in the area. Wood Mackenzie Ltd., however, forecast recently that the market could be adequately supplied without developing "expensive or challenging" shales such the neighboring Horn River (OGJ, Dec. 8, 2008, p. 32).

The report also cited other Canadian efforts toward meeting future increases in North American demand, including Irving Oil Ltd. and Repsol-YPF SA's Canaport LNG terminal in New Brunswick. The terminal is Canada's first and will be used to meet demand in the US northeast and eastern Canada starting early 2009. Construction of three 2.5 bcf storage tanks is complete. Total sendout capacity is 1.2 bcfd, with the first phase of operations using existing and expanded capacity on the Maritimes & Northeast Pipeline to move gas into the US.

Contact Christopher E. Smith at chriss@ogjonline.com.

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